The decision by Beijing Waterworks Group, which is in charge of the city's water supply, comes after a drinking water researcher at the Beijing Healthcare Association said that the city's tap water has become more polluted.
The researcher, told the Southern Weekly that she and her husband, also a water expert, for the last 20 years have relied bottled water for drinking rather than the city's tap water.
But Liang Li, a spokesperson for the waterworks, maintains that "Beijing's tap water meets national water quality standards, it is safe to drink," the Global Times reports.
The 106 water quality indicators used to come up with the rating posted on the authority's website include the intensity of pesticide residue and the concentration of heavy metal. Beijing Waterworks says there are more than 300 water quality monitoring stations in central urban areas, including colleges, offices and residential areas.
Still, there is skepticism regarding the reliability of the waterwork's claims.
"Despite the 100 percent safety rate claimed by the authority, the water that comes out of the waterworks ... usually deteriorates after transiting through the water distribution system," said Yuan Zhibin, an associate researcher at the Institute of Policy and Management under the Chinese Academy of Sciences, China Daily reports. Thus the water can become polluted by the time it reaches its final destination.
Meanwhile, research firm Euromonitor International projects sales of bottled water in China to increase to $16 billion, compared to $9 billion last year and $1 billion in 2000.
"You don't dare drink the tap water in China, and so many people are moving from rural areas to work in the cities" where bottled water is more common," Hope Lee, a Euromonitor analyst in London was quoted as saying by Bloomberg.
China is a "key priority" for Nestle SA, and is currently the company's eighth-biggest water market by volume" Gilles Duc, who heads Nestle's water business in China, told Bloomberg. "The market is increasing a lot and we want to participate in that growth."
Euromonitor says Nestle's water business in China increased by 27 percent in 2012.
Research from the Chinese Academy of Engineering and the Ministry of Environmental Protection has shown that 320 million rural people in China still do not have access to safe drinking water, with 190 million using drinking water that contains excessive levels of hazardous substances.